Gold Tsunami: on the Cusp of $3,000+?

Early this year we suggested a 50% rise in Gold to $1860 – $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012, drowning any doubters in its wake. Below are a number of factors that support that view. Words: 1250

Those are the views of Goldrunner (www.GoldrunnerFractalAnalysis.com) as conveyed in his original article* which was edited by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!). Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

——-

Attention Readers!

1. This article continues to get thousands of reads every week but I don’t know what the referring site (source) of the article is. Please send me an email to editor@munknee,com with the information please. Thanks.

Goldrunner goes on to say: The Gold Tsunami analogy continues, and it goes like this……..

“The Dollar Inflation psychology pulled back out into the sea, taking the price of Gold with it. Those of a deflation bent ran amok on the naked sea bed for a bit, acting like the Dollar Inflation and Gold Price run was over.

Suddenly, the new wave of paper currency inflation popped up on the horizon last week, and many Dow Stock ‘Crashers’ were mowed down with the early start of the tidal wave of Dollar Inflation and rise in Gold.

Many ran back to the shore and looked back to watch as the waters approach the shore, but the tidal wave of paper currency inflation is just starting its acceleration that might wellpropel Gold much higher into the middle of 2012 than practically anyone thinks.

Everybody can see the symmetrical triangle forming on the Gold chart, but few really believe the size of the move in Gold that is possible on this door step of the ‘Fractal Gold Cycle’ as seen in the late 70’s.”

The story of the developing gold tsunami will be remembered as the Paper Currency inflation gains speed and volume driving the price of Gold into the next more parabolic leg on the chart as the dollar devaluation accelerates in an attempt to deflate away the massive debts world-wide.

Become the editor/publisher of your very own financial site quickly, easily and inexpensively

Contact: Editor [at] munKNEE.com for details

Early this year we suggested a 50% rise in Gold to $1860 – $1,920 into mid-year (see here). Now, we see the Gold tsunami will realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012, drowning any doubters in its wake. Below are a number of factors that support that view:

1) Last week we saw a sudden sharp change in market psychology as a group of Central Banks announced that they would provide liquidity to Europe. The Fed announced that it would provide hundreds of billions of Dollars to the EU Central Bank in terms of low interest loans so the EU Central Bank could make loans to the European Banks. This really amounts to the Fed printing new Dollars – a huge new round of US Dollar Inflation is starting.

2) This follows on the footsteps of the European Banks bundling up crappy assets into securitized bundles to present to the EU Central Bank as collateral for loans – sort of a “European Begging Bowl” move that smacks of what the Fed did back in the 2008 deflation scare for the US Banks. That Fed “Begging Bowl” ruse led to massive US Dollar Inflation as the Fed printed somewhere up to 7 trillion Dollars over time.

3) Interestingly enough, one source claimed that the European Banks need about $7 trillion this time – approximately the same amount as the US Banks back in 2008. If so, the current reflation via paper currency inflation might well match what we saw back in late 2008/ early 2009. Any new program by the Fed would be additive, and it would dwarf that figure. This would be huge for Gold, for Silver, and for the PM Stocks; especially with Gold and the PM Stock Indices sitting at a high level with little chart resistance above.

4) Gold appears to be deep in a triangle correction where we’d expect to see a break-out to the upside as a continuation of trend. The Dow made a sharp move higher last week as we saw what paper currency inflation can do to the markets in this environment. Many see this last week as the Fed precursor to the next round of aggressive, world-wide debt monetization.

5) The US Banks wrote the credit default swaps for the European Debt, and thus are the counterparty should the Europeans default on those loans. In no way will that be allowed to happen.

6) All of the above comes at a point in the cycle where Gold started a sharp momentum run higher in the late 70’s. The HUI and other PM Stock Indices have been tracing out a huge expanding triangle for some time. This reminds me of the inverse of the Real Estate Market just before it made a huge move down in 2007 because everybody knows that the PM Stock Indices are going to break higher, but Mr. Market is sometimes slow with the timing. When the expanding triangle for the PM Stock indices busts to the upside, it will do so via aggressive 3rd wave dynamics.

7) Copper appears to be bottoming consistently with a similar point in the late 70’s Fractal Cycle. Back then, Copper soon started a rally that eventually broke to new highs with Copper eventually doubling in price from the last top before its Bull run was over. Since many PM Stocks produce copper as a by-product, such a move in copper would support a big move up in earnings for most PM Company producers over the next couple of years as well as add huge value in terms of resource valuations for most PM Explorers.

THE GOLD CHARTS

The first Gold chart is an arithmetic chart of Gold from Netdnia.com. The triangle on this chart can be drawn a few different ways, but this is one viable representation. As of Friday, 12-02-11, Gold hit the top of the triangle and started to reverse with what appears to only be 2 to 3 weeks left in the triangle. We have already laid out our expectations for the Gold triangle to break to the upside based on the similar fractal triangle in the late 70’s. The only question I have is this: if this triangle termination is so obvious to the many, what will be the ‘hook?’ (The 70’s charts are reserved for our subscribers.)

The next chart is Gold in Rand (the currency of South Africa, a major gold producer) which currently exhibits many of the characteristics as it did just before the start of the huge run upward in the HUI Index and the SA Gold producers in the fractal period in 2002.

It looks like it is going to be déjà vu, all over, again.

We are moving well into seasonal strength for Gold and for Silver. We are well into the part of the cycle where global competitive currency devaluations are in full swing so the Dollar Index tainted “pricing index” is reduced to an oscillator.

The final chart shows Log Gold in the main chart:

The chart above suggests that:

1) The HUI, shown in green, is mired in its expanding triangle over the ‘cup formation.’

2) Gold in Rand, shown in blue, is tracking the Silver chart ascending triangle breakout and run, but trailing by about 6 months.

3) Gold will break to the upside out of the current triangle formation to initially find resistance around $2,000 to $2,040 at the angled black line, then move up to $2,250 to $2,350 at the blue top channel. After those resistance levels are penetrated, we’d expect Gold to be off to the tsunami races.

From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over? [Let’s take a close look at a variety of factors and scenarios before coming to a conclusion.] Words: 5717

Many market participants are wondering why [gold] is not responding more positively to Europe’s never-ending sovereign debt crisis and other worrisome economic and political developments around the world…Technical analysts say that gold must build more support in the $1,750 to $1,800 an ounce range before it can muster enough strength to sustain a meaningful and lasting rally. Sooner or later, [however,] thanks to a continuously improving fundamental picture, gold will register a sustainable advance above $1,800 an ounce, possibly never again to see prices below this level. [Let me explain why I believe strongly that that is the case.] Words: 800

Gold is in a bull market and, [believe it or not,] so are the gold stocks despite their struggle as a group to outperform gold… but [neither] is anywhere close to a bubble, nor the speculative zeal we saw in 2006-2007. Thus, it begs the question” “What lies ahead and when can we expect the initial stages of a bubble?” To figure this out we first need to get an idea of how long the bull market will last and then where we are now based on various indice analyses. [Below I do just that.] Words: 785

With the present major correction in gold, silver and the mining sector it is important to look at the big picture and see what the charts are saying from a technical fractal relationship with what happened back in 1979 when the last truely major bull run occurred. To date the situation is, frankly, no different than it was back then unfolding just as it should. As a result we can expect MAJOR upward price action in physical gold and silver and in their mining (producers, developers, explorers and royalty streamers alike) in the next few months on their way to their respective parabolic peaks in the years ahead. Read on. Words: 1265

Since the fundamentals still point to gold’s long-term viability… why [are] investors responding by selling gold…? I was always told not to look a gift horse in the mouth… [so] take advantage of the dip. Words: 880

The technical situation is ultra-bullish for both gold and gold stocks. Sentiment indicators…continue to show [that] the dollar is poised for a serious decline and the MACD on the gold chart is giving one of the most powerful buy signals in the history of the bull market. The GDX should reach $75 a share by year-end and gold should push to new highs in the $2000 area by January of 2012 [while silver] could possibly be the best investment opportunity available to investors for many years to come! [Let me explain and back up my comments with an array of charts.] Words: 781

You have no doubt read countless articles on the price of gold costing x dollars per “troy ounce” or perhaps just x dollars per “ounce” but the difference between the two measurements is significant. For that matter, what’s the difference between a 24 karat gold ring and an 18 karat gold ring? What’s the difference between a .75 and a 1.0 carat diamond? Let me explain. Words: 963

143 analysts maintain that gold will eventually reach a parabolic peak price of at least $3,000/ozt. before the bubble bursts. Of those 143 a total of 103 see gold achieving a price of at least $5,000/ozt. and 20 predict that gold will reach a parabolic peak price of $10,000 per troy ounce or more. Take a look here at who is projecting what, by when and why. Words: 745

Will our National Debt be trillions higher than today in a few years? If you think the answer is yes, than buying physical gold today is a good idea. It’s that simple. Just look at the chart. Words: 140

By almost any measure, gold stocks are undervalued but should we load up? Gold mining companies are earning record margins. Stock prices, however, have not responded in similar fashion but when the broader investing community begins to take notice, investors will snap up these highly profitable stocks and push prices higher. The “catch up” in gold stocks could be tremendous but the question, of course, is timing. We don’t know when gold stocks will begin to catch up and the data don’t suggest they must rise right now or that they’ve hit bottom so should we load up just now? Words: 590

One comment

it will be interesting to see if this triangle breaks up or down. We’ve had big volatility this week. If it breaks up, then we could quikcly burst to $2300. If it breaks down, then we might get the last great buying opportunity we’ll see before gold moves towards $10,000 an ounce

DISCLOSURE: It is our intent that all posts on this site be in accordance with the requirements, restrictions and terms of the Copyright Law of the United States and all other copyright treaties to which the United States is party and more specifically of the Digital Millennium Copyright Act - Blogger . As such, all posts on this website have been screened at Library of Congress Catalog as to their eligibility for posting. Should any post be deemed to be inadvertently in contravention of these Acts' terms please advise with substantiation of such apparent contravention (i.e. registration number) and the article in question will be immediately deleted from the site. Also, visit U.S. Code 17-107 Limitations on Exclusive Rights - Fair Use

FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of financial, economic and investment issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

COPYRIGHT & DISCLAIMER: Lorimer Wilson is not a registered advisor and does not give investment advice per se. The articles to be found on the site are expressions of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. Please consult with a qualified investment advisor who is licensed by appropriate regulatory agencies in your legal jurisdiction before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments. The information on this site was obtained from sources which we believe to be reliable, but we do not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that while Wilson may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website they do not intend to disclose the extent of any current holdings or future transactions with respect to any particular security and, as such, you should consider this before investing in any security based upon statements and information contained in any report, post, comment or recommendation you read on the site.